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January 15, 2021

By Erin Kuzz

Back to International Employment Law




The continuing legislative and litigation impact of COVID-19

Legislation across Canada continues to be amended to address the specific challenges of the COVID-19 pandemic. In many jurisdictions, employment standards legislation has been amended to provide for unpaid, job-protected leave for employees during the infectious disease emergency. Legislation in some provinces has also been amended to avoid the automatic termination of employees who have been temporarily laid off. The Federal Government has also amended the emergency financial benefits to employees that are not working in relation to COVID-19 (including for reasons related to childcare or lack of available work), recently signalling an intended carve out for employees who voluntarily leave Canada, thus requiring a period of quarantine upon return.

While there was initially much discussion of constructive dismissal claims associated with employee layoffs, few have come to pass. That said, as layoff periods stretch further, it is expected such claims will increase, with employees claiming termination damages on the basis that the layoff constituted a unilateral change to a fundamental term or condition of employment. We also expect to see court awards for pay in lieu of notice of termination increase, as such awards are intended to approximate the period of time it will take the terminated employee to secure comparable employment and such increased awards are seen during economic downturns.


Courts continue to undermine notice provisions

Unless an employment agreement contains effective language limiting termination entitlements, almost all Canadian jurisdictions default to common law assessments of what constitutes reasonable notice of termination, taking into account the employee's position, tenure, age, compensation, and any other factor which may impact their ability to secure alternate employment. There is a continuing trend of courts finding new and creative ways to render language purporting to limit those entitlements unenforceable, effectively stripping employers of contractual protections in favour of granting employees increased notice period awards. We expect cases to reach higher courts this year, potentially the Supreme Court of Canada, where some clarity should be provided.


Tackling the challenges of remote working

Even once a COVID-19 vaccine is widely available, some changes to the way in which work is performed may not revert to pre-COVID times. While "work from home" arrangements were initially thought to be a temporary necessity, many Canadian employers learned some employees prefer such an arrangement. Employers are contemplating what such arrangements may mean in the long term, including compensation adjustments, allowances, how to monitor productivity, and encourage team cohesiveness.

In many Canadian jurisdictions the home can be considered a "workplace" for purposes of Workers Compensation legislation, meaning employers will need to consider how to best ensure employees work safely from home, as well as how to ensure any such compensation claims are legitimate.

With thanks to Erin Kuzz of Sherrard Kuzz LLP for his invaluable collaboration on this update.




Harassment in the Workplace

There has been an increase in workplace harassment complaints and litigation in 2020. The Ontario Court of Appeal recently confirmed in Merrifield v Canada, 2019 ONCA 205 that there is no recognized tort of harassment, but the Court left the door open for the possibility of the tort of harassment in appropriate contexts.

Some Canadian provinces have introduced workers compensation legislation that provides employees with certain entitlements in the context of chronic mental stress claims. In Ontario, a recent tribunal decision barred a civil claim for constructive dismissal and workplace harassment, on the basis that the claim was a chronic mental stress claim. The Tribunal claim was subsequently dismissed as the matter fell within the exclusive jurisdiction of the workers' compensation board. Further clarity is anticipated from courts across Canada on the impact of mental stress workers' compensation claims in civil proceedings.


Drugs and Alcohol in the Workplace

Employers continue to navigate the impact of cannabis legalization and the use of medical marijuana in the workplace. The workers' compensation tribunals have recently introduced guidelines in Ontario, providing some clarity on the use of medical cannabis as a treatment for work-related injuries. Under the guidelines, the circumstances where medical cannabis is permitted as a treatment for a work-related injury include:

  • neuropathic pain;
  • spasticity resulting from spinal cord injury;
  • nausea and vomiting related to chemotherapy;
  • loss of appetite related to HIV or AIDS; and
  • pain or related symptoms in palliative care.

The obligation to accommodate medical marijuana in the workplace continues to be a challenge for employers across Canada, particularly for employees in safety-sensitive positions. Employers will need to ensure that they have robust drug and alcohol policies in place to address any particular concerns.




Making Ontario Open for Business Act, 2018

The Making Ontario Open for Business Act received Royal Assent on 21 November 2018 and came into force on 1 January 2019. This Act repeals many of the amendments to the Ontario Employment Standards Act (“ESA”), 2000 and Labour Relations Act (“LRA”), 1995 introduced by Bill 148 in 2018.

Key amendments to the ESA include repealing:

  • the equal pay guarantees for part-time and temporary workers;
  • the new scheduling restrictions that were slated to come into effect 1 January 2019;
  • the entitlement to two paid personal emergency leave days each calendar year; and
  • the increase of minimum wage to $15 per hour effective from 1 January 2019.

Key amendments to the LRA include repealing:

  • the right for a union to apply for a list of employee names and contact information;
  • the right for a union to apply for card-based certification for specified industries (home care and community services, temporary help agencies and building services); and
  • the mediation-arbitration process introduced through Bill 148 that provided a party with access to first contract mediation-arbitration even in the absence of any bad faith bargaining claim.


Recreational cannabis legalized in Canada

On 17 October 2018, the possession and sale of cannabis became legal in Canada. Each province has its own legislation governing how cannabis can be sold and where it can be consumed. With the legalization of cannabis has come heightened concern for employers about the impact of potential impairment in the workplace. As a result, employers throughout the country have looked to amend their existing substance use policies or implement entirely new ones to specifically address legal cannabis consumption, raising challenging issues such as accommodation of dependency and workplace random drug testing.




Ontario Provincial Passed Bill 148, the Fair Workplaces, Better Jobs Act

The Bill took effect on 1 January 2018. Changes include new scheduling restrictions, equal pay guarantees for part-time and temporary workers, an increase to the minimum wage, and the ability for a union to apply for employee contact information.

Alberta also reviewed all of its major workplace laws (employment standards, labour relations, occupational health and safety, and workers’ compensation) and implemented major changes. Other provinces will be closely watching the results, with British Columbia already having indicated that it too intends to review its labour and employment legislation.


Violence and Harassment

While #MeToo has significantly affected the media and politics, its impact will be felt in more typical workplaces as well. The combination of legislative changes made in the past few years, which provide greater recognition of and protection against violence and harassment, and changes to the social conversation, means employers will need to think carefully about their policies and practices.


Drug Testing and the Workplace

Drug testing has been a hot button legal issue in Canada for some time—in particular the ability of an employer to use random testing to deter drug and alcohol use in unionized, safety sensitive workplaces. Following a 10-year legal battle random drug and alcohol testing at Canada’s largest public transit operator, the Toronto Transit Commission’s was upheld and implemented, setting a new standard in Ontario.




Unpaid Wages

An issue that will get further scrutiny in 2017 is the issue of unpaid wages. By this we mean unpaid overtime and payment either for time spent performing work remotely (via smartphone, etc.) or for the time that does not qualify for overtime (as it doesn’t meet the hours threshold), but is in excess of the hours of work specified in either an employment agreement or an employee handbook.


Drugs and the workplace

The use of medicinal marijuana and the legalization of marijuana generally and its impact on workplaces.


Impact of the Changing Workplace Review and legal protections for atypical workers

The impact of the results of the Changing Workplaces Review and legal protections afforded ‘contingent’ or ‘precarious’ workers.




Ontario “Changing Workplace Review”

Ontario is conducting a review of the changing nature of the workplace and potential revisions to the Employment Standards Act 2000 and the Labour Relations Act 1995. The scheduled public consultations have now concluded. The Reviewers have issued their Interim Report setting out the specific issues for review and the potential amendments under consideration indicating that they intend to issue their final recommendations in Spring 2017. Many Canadian provinces, as well as the Federal government, follow Ontario legislation and common law in respect of employment and labour issues, and may also follow some or all of the recommendations.


Terminations without cause not permitted in Federal sector

Although employment issues for the vast majority of Canadian workers are governed on a province-by-province basis, employees in some sectors (such as interprovincial transport, communications, banking, and airlines) are governed under the Federal Canada Labour Code. In July 2016, the Supreme Court issued a decision reversing an earlier ruling concerning the ability of federally regulated employers to terminate employees without just cause by providing notice or pay in lieu of notice of termination. The Supreme Court’s decision confirms that non-unionized, non-managerial employees with 12 or more months of service effectively have ‘just cause’ protection from dismissal (unless that dismissal was due to lack of work or discontinuance of a business function).


Bill 132: Sexual Violence and Harassment Action Plan

Bill 132 (amendments to the Occupational Health and Safety Act) came into force in September 2016 and requires more stringent standards for workplace investigations and the ability of the Ministry of Labour to order an employer to retain an external investigator.


Expansion of accessibility and accommodation legislation

The phasing-in of the Accessibility for Ontarians with Disabilities Act in Ontario, the continued work in Nova Scotia towards accessibility legislation, and the development of accessibility legislation in the Province of Manitoba is a sign that Canadian jurisdictions will focus on becoming more inclusive of persons with disabilities. These changes include requirements to create and advise employees of support policies, make accessible information required to perform a job, establish a written process to develop individual accommodation and return to work plans, and consider accessibility needs regarding performance management, career development and advancement, and redeployment.

With thanks to Geoff Lowe, Erin Kuzz and Patrick Groom of Sherrard Kuzz LLP for their invaluable collaboration on this update.


Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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